Factors Driving Increasing Cost of Auto Insurance

November 1st, 2017

The auto industry is experiencing significant loss costs. Industry combined ratios have been over 102 percent each year since 2011, and frequency and severity are up across all personal coverage types, except comprehensive. While the entire industry will no doubt be forced to respond, we wanted you to understand some of the factors that may affect premiums moving forward.

People are buying more cars. In 2015, Americans bought a record 17.5 million new vehicles.2

People are driving more. Thanks to lower fuel prices and higher employment, 2015 saw the highest increase in driving in 25 years. 3

Distracted driving is increasing. According to the National Highway Traffic Safety Administration, fewer people are talking while driving, but more are texting and surfing the web.4